If it's international markets you want, the iShares Core MSCI Total International Stock ETF (IXUS -0.59%) is a good way to go. The fund derives its holdings from an MSCI global index and subtracts the U.S. listings. It holds almost 4,170 stocks, including large-, mid-, and small-cap companies from around the world.
The ETF offers diversified international exposure. Its top five geographies as of April 2026 were:
- Japan: 14.9% of the fund's holdings
- United Kingdom: 9%
- Canada: 8.5%
- China: 7.1%
- Taiwan: 6.9%
The iShares Core MSCI Total International Stock ETF allows you to invest globally at an affordable expense ratio of 0.07%. It also has an attractive dividend yield of 2.9% based on dividend payments over the last 12 months (as of April 2026).
Tax considerations for ETFs
ETFs tend to be more tax-efficient compared to mutual funds. However, investors still need to keep taxes in mind when holding an ETF in a regular brokerage account.
Investors will pay two types of taxes on ETFs that hold stocks or bonds:
- Taxes on income: ETFs that hold dividend-paying stocks must distribute this dividend income to investors at least once each year. Qualified dividends get taxed at the lower federal long-term capital gains rates of 0%, 15%, or 20%. Meanwhile, non-qualified dividends and interest income from bonds get taxed as ordinary income, which is up to 37%.
- Taxes on capital gains: If you sell an equity or bond ETF, you'll pay taxes on the gain depending on how long you held the fund and your annual income. ETFs held for more than a year get taxed at the lower federal long-term capital gains rates of 0%, 15%, or 20%. Meanwhile, funds held less than a year get taxed at the short-term capital gains rate, which is the same as your ordinary tax rate (up to 37%).
Types of ETFs
There are several types of ETFs that investors can buy, including:
- Broad index funds: Many of the largest ETFs track a broad market index, such as the S&P 500 or the Nasdaq-100. These funds enable investors to gain diversified market exposure through a single low-cost fund.
- Sector ETFs: These ETFs focus on stocks in a specific stock market sector, such as technology, energy, or healthcare.
- Asset-focused funds: These funds invest in a specific asset class, such as government bonds, dividend stocks, small-cap stocks, or commodities.
- Thematic ETFs: Thematic funds invest in themes such as semiconductor stocks, artificial intelligence (AI), international stocks, or clean energy.